Skill shortage in the UK: can India fill the gap?

Emilien Coquard
4 min readJun 22, 2023

The skill shortage in the UK is costing companies £6.6 billion per year according to a recent report from the Open University Business Barometer. That’s due to a combination of the costs of finding candidates and training up underskilled employees, as well as the reduction in output and revenue due to staffing shortfalls.

With more than two-thirds of UK companies affected, it’s no surprise that more and more companies are looking for ways to plug the talent gap. While there are several options available, offshoring is becoming the go-to solution with India the leading choice for software engineering.

Keep reading to find out the current state of the skill shortage in the UK and how India can fill the talent gap.

The cause and scale of the skill shortage in the UK?

Companies have struggled to find certain skills for a long time. However, a recent report from the UK government pointed to three factors that have accelerated this trend at breakneck rates.

The first is the ongoing digital revolution which is now touching every industry and resulting in an exponential increase in demand for software development skills. The second was the covid pandemic lockdowns that not only turbocharged the ongoing digital transformation trend but also froze immigration and brought on the “great resignation” where a large chunk of skilled, older developers left the job market for good. The final factor is the ongoing reduction in net migration from the EU due to Brexit which has increased some skills gaps.

Together, these have caused a dramatic increase in demand and a cliff-edge drop in the supply of high-value skills.

Almost every industry in the UK has been hit by skill shortages, and the IT sector is no exception.

  • IT has the second highest number of vacancies per 100 employees [UK Gov].
  • From February to April 2023, there were over 50,000 advertised vacancies in the IT and communications sector. [Office of National Statistics].
  • The tech talent pool is worse in 2023 than in 2022 [Statistic].

While there are options including training up unskilled employees and increasing tech budgets, they take time and money: the two most costly resources a company has.

There is, however, a far more popular option for overcoming the skill shortage in the UK.

Overcoming the UK and Irish talent crunch

How businesses can navigate the skills gap at home and scale quickly with offshore talent

Going offshore: the go-to solution to the UK skill shortage

A recent report showed 38% of IT leaders expected their use of offshore development resources will increase in 2023.

And it’s an even greater 60% for companies with larger software development teams. It’s easy to understand why. When the other options are “do nothing” or spending more and more to bribe local talent away from competitors with bigger names and budgets, accessing areas with skills surpluses is the obvious solution.

By going offshore, Tech leaders are able to unlock talent pools beyond their borders. Instead of the UK’s limited developer community, UK companies are able to attract the best talent from countries where there are surpluses of software engineers.

While there are many offshore locations bidding for UK companies’ attention, there’s one that stands out as the prime location for building dedicated software development teams: India.

Why India is the favourite location for dedicated software development teams

India has the hard and soft skills required for high-quality software development teams. And what’s more, it has them at a colossal scale.

A recent report estimated that India would become the largest developer community with over 5 million software engineers by 2025. Github perhaps hints at an even greater community. In 2022 they announced that the Indian community had reached 9.75 million users which was a 2.5 million increase since 2021. This makes it second only behind the US which it’s due to overtake in 2024.

These are the results of India’s investment in its educational system with a focus on STEM disciplines. There are now an estimated 1,081,000 students studying computer science engineering across India. Bangalore alone has 1 million software engineers and has become the fastest-growing tech hub in the world.

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